Sempre Ltd. P'ship v. Maricopa County

• Decision Date: 22 June 2010
• Docket Number: No. 1 CA-TX 08-0008.,1 CA-TX 08-0008.
• Citation: Sempre Ltd. P'ship v. Maricopa Cnty., 225 Ariz. 106, 235 P.3d 259 (Ariz. App. 2010)
• Parties: SEMPRE LIMITED PARTNERSHIP, an Arizona limited partnership, Plaintiff-Appellant,v.MARICOPA COUNTY, a political subdivision of the State of Arizona, Defendant-Appellee.
• Court: Arizona Court of Appeals

225 Ariz. 106

235 P.3d 259

SEMPRE LIMITED PARTNERSHIP, an Arizona limited partnership, Plaintiff-Appellant,v.MARICOPA COUNTY, a political subdivision of the State of Arizona, Defendant-Appellee.

No. 1 CA-TX 08-0008.

Court of Appeals of Arizona Division 1, Department T.

June 22, 2010.

Mooney Wright & Moore PLLC By Paul J. Mooney, Jim L. Wright, Paul Moore, Mesa, Attorneys for Plaintiff-Appellant.

Richard Romley, Maricopa County Attorney ByRichard W. Garnett, III, Maricopa County Attorney's Office, Division of County Counsel/Civil Division, Phoenix, Attorneys for Defendant-Appellee.

OPINION

GEMMILL, Judge.

¶ 1 Sempre Limited Partnership (“Sempre”) filed an action in the Arizona Tax Court to challenge the Maricopa County Assessor's valuation of Sempre's real property.The tax court dismissed Sempre's claim for lack of subject matter jurisdiction, concluding that Sempre was required to seek administrative review pursuant to Arizona Revised Statutes(“A.R.S.”)sections 42-12153(2006) and 42-16051 (2006) before proceeding in superior court.Considering these statutes together with A.R.S. §§ 42-16201(A)(2006) and 42-15104 (2006), we hold that a taxpayer such as Sempre need not first seek administrative review before filing a direct appeal in the tax court.Concluding therefore that the tax court has jurisdiction to hear Sempre's challenge, we reverse the dismissal of this action and remand for further proceedings.

FACTS AND PROCEDURAL BACKGROUND

¶ 2 On February 9, 2007, the County mailed Sempre a notice of classification and valuation concerning its real property located in Maricopa County(ParcelNo. 141-31-011B)(the “property”).The notice, applicable to the 2008 tax year, stated the County had valued the property on the basis that it was not used for agricultural purposes.To seek administrative review of the valuation, Sempre was required to file an appropriate petition on or before April 10, 2007.SeeA.R.S. § 42-16051(D)(60-day deadline after county mails notice of property valuation).

¶ 3 Sempre did not file a petition for administrative review of the valuation.Instead, on November 15, 2007, Sempre filed a complaint and notice of appeal directly in the tax court.The County moved to dismiss pursuant to Rules 12(b)(1)and12(b)(6),Arizona Rules of Civil Procedure.In reliance on A.R.S. §§ 42-12153and42-16051, the County argued that Sempre had not exhausted its administrative remedies and did not have the right to file an appeal directly in tax court.

¶ 4 After briefing and oral argument, the tax court found in favor of the County and granted its motion to dismiss for lack of jurisdiction.Sempre filed a motion for reconsideration that was denied.We have jurisdiction over Sempre's appeal in accordance with A.R.S. §§ 12-170(C)(2003)and 12-2101(B), (D)(2003).

ANALYSIS

¶ 5“[T]he right to appeal from a property classification or valuation exists only by force of statute and is limited by the terms of that statute.”Maricopa County v. Superior Court,170 Ariz. 248, 252, 823 P.2d 696, 700(App.1991).We apply a de novo standard when reviewing the tax court's legal, statutory, and jurisdictional rulings.SeeLyons v. State Bd. of Equalization,209 Ariz. 497, 499, ¶ 6, 104 P.3d 867, 869(App.2005).Our primary task is to ascertain and give effect to the legislature's intent with respect to the several relevant statutes.SeeDeVries v. State,221 Ariz. 201, 204, ¶ 6, 211 P.3d 1185, 1188(App.2009).We first look to the plain language of the statutes as the most reliable indicator of their meaning.SeeNordstrom, Inc. v. Maricopa County,207 Ariz. 553, 556, ¶ 10, 88 P.3d 1165, 1168(App.2004).We interpret related statutes to harmonize their provisions.SeeMorgan v. Carillon Invs., Inc.,207 Ariz. 547, 549, ¶ 7, 88 P.3d 1159, 1161(App.2004)aff'd,210 Ariz. 187, 109 P.3d 82(2005);State v. Cid,181 Ariz. 496, 499-500, 892 P.2d 216, 219-20(App.1995)(stating the rule that statutesin pari materia are read together and harmonized to avoid rendering any word, clause, or sentence superfluous or void).

¶ 6 The County argued and the tax court agreed that Sempre was not entitled to file a direct appeal in tax court but must instead initially pursue administrative review in accordance with the last sentence of the 2006 version of A.R.S. § 42-12153(B):

The owner of property or the owner's designated agent under § 42-16001 shall file a completed agricultural use application form with the county assessor before the property may be classified as being used for agricultural purposes.If the ownership of a property changes, an agricultural use application form must be filed by the new owner within sixty days after the change in ownership to maintain the agricultural use status.If the owner or the owner's agent fails to file an application form as prescribed in this subsection, the assessor shall not classify the property, on notice of valuation, as being used for agricultural purposes.The owner or agent may appeal the classification as prescribed by chapter 16, article 2 of this title regardless of whether the owner or agent filed an application form.

(Emphasis added.)Chapter 16, article 2 sets forth an administrative review process.SeeA.R.S. § 42-16051.

¶ 7 Sempre bases its right to forego administrative review in favor of a direct appeal in tax court primarily on A.R.S. § 42-16201(A):

A property owner who is dissatisfied with the valuation or classification of the property as determined by the county assessor may appeal directly to the court as provided by this article on or before December 15regardless of whether the person has exhausted the administrative remedies under this chapter ...

(Emphasis added.)Further support for Sempre's position may be found in A.R.S. § 42-15104:

A person who is not satisfied with the valuation or classification of the person's property determined by the assessor may:

1.Petition the assessor for review pursuant to chapter 16, article 2 of this title.

2.Appeal to tax court pursuant to § 42-16201.

(Emphasis added.)

¶ 8 For the reasons that follow, we conclude that the tax court erred in dismissing Sempre's complaint for lack of jurisdiction because §§ 42-16201(A)and42-15104 authorize Sempre's filing of a direct appeal in tax court.

¶ 9We first observe that §§ 42-16201(A)and42-15104 plainly and unequivocally authorize a taxpayer dissatisfied with the assessor's valuation or classification of property to appeal directly to the tax court.Moreover, § 42-16201(A) rejects the necessity of pursuing administrative review pursuant to A.R.S. § 42-16051 by expressly authorizing direct appeals “regardless of whether the person has exhausted the administrative remedies under this chapter.”Also, we are not persuaded that the last sentence of § 42-12153(B)requires exhaustion of administrative remedies before a taxpayer may pursue a judicial appeal.

¶ 10The legislature's use of the word “may” in the last sentence of § 42-12153(B) creates an ambiguity because “may” is capable of conveying either a mandatory or permissive requirement.SeeFrye v. S. Phoenix Volunteer Fire Co.,71 Ariz. 163, 167, 224 P.2d 651, 654(1950)(explaining that the meaning of “may” as mandatory or permissive depends on legislative intent).Although a “may” provision normally is interpreted as permissive In re Maricopa County Superior Court No. MH2003-000240,206 Ariz. 367, 369, ¶ 7, 78 P.3d 1088, 1090(App.2003), this court has previously determined that the use of “may” in describing administrative review processes does not necessarily render the procedures permissive.See, e.g., Mullenaux v. Graham County,207 Ariz. 1, 5, ¶ 14, 82 P.3d 362, 366(App.2004);Hamilton v. State,186 Ariz. 590, 593-94, 925 P.2d 731, 734-35(App.1996);Estate of Bohn v. Waddell,174 Ariz. 239, 248-50, 848 P.2d 324, 333-35(App.1992).To properly interpret “may” in the last sentence of § 42-12153(B), we must examine the language of this section as well as the provisions of related statutes.

¶ 11We resolve the ambiguity in the last sentence of § 42-12153(B) by interpreting “may” as permissive, not mandatory, because “[w]hen the Legislature has used both ‘may’ and ‘shall’ in the same paragraph of a statute, we infer that the Legislature acknowledged the difference and intended each word to carry its ordinary meaning.”SeeHCZ Constr., Inc. v. First Franklin Fin. Corp.,199 Ariz. 361, 365, ¶ 15, 18 P.3d 155, 159(App.2001).The legislature in § 42-12153(B) used “shall” twice and “must” once, evidencing mandatory intent.We may therefore infer that in providing in the same statute that an aggrieved taxpayer “may” seek administrative review, the legislature intended “may” in its usual, permissive form.

¶ 12 Additionally, all three of these statutes were enacted in 1997 as part of a comprehensive overhaul of our property tax statutes.SeeLaws 1997, Ch. 150, § 172, eff. Jan. 1, 1999.When interpreting multiple statutory sections that were enacted simultaneously, “the duty to harmonize them is particularly acute.”U.S. West Communications, Inc. v. Hamilton,224 F.3d 1049, 1053(9th Cir.2000)(citingErlenbaugh v. United States,409 U.S. 239, 244, 93 S.Ct. 477, 34 L.Ed.2d 446(1972)).This simultaneous enactment diminishes the possibility that the legislature intended § 42-12153(B) to override-without expressly so stating-the plain language of §§ 42-16201(A)and42-15104.Also, § 42-12153(B) does not provide that administrative review “shall” or “must” be undertaken before seeking judicial review.The doctrine requiring exhaustion of administrative remedies does not apply when the statutory language authorizes a permissive administrative remedy.Univar Corp. v. City of Phoenix,122 Ariz. 220, 224, 594 P.2d 86, 90(1979);Campbell v. Chatwin,102 Ariz. 251, 257, 428 P.2d 108, 114(1967).

¶ 13 The County argues that § 42-12153(B) addresses specifically a taxpayer's appeal rights when no agricultural use application has been filed and...